Eliot Spitzer Sued for $90 Million in Twin Libel Suits

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William Gilman and Edward McNenney are former executives at the Marsh & McLennan Co. insurance consultancy. While Eliot Spitzer was Attorney General for New York in 2004, he opened a probe into the company's practices, in part investigating bid-rigging kickbacks, and eventually it forked over $850 million in a civil settlement. Eight of its executives, including Gilman and McNenney, were indicted, and the two men were eventually found guilty in 2008. But in 2010 a judge threw out their cases based on new evidence. Later that same year, in August, Eliot Spitzer wrote a column for Slate that mentioned the case against Marsh & McLennan. He was responding to the Wall Street Journal, which had mocked Spitzer for the public unraveling of his cases — including the one against Gilman and McNenney.

The Journal's editorial also seeks to disparage the cases my office brought against Marsh & McLennan for a range of financial and business crimes. The editorial notes that two of the cases against employees of the company were dismissed after the defendants had been convicted. The judge found that certain evidence that should have been turned over to the defense was not. (The cases were tried after my tenure as attorney general.) Unfortunately for the credibility of the Journal, the editorial fails to note the many employees of Marsh who have been convicted and sentenced to jail terms, or that Marsh's behavior was a blatant abuse of law and market power: price-fixing, bid-rigging, and kickbacks all designed to harm their customers and the market while Marsh and its employees pocketed the increased fees and kickbacks. Marsh as a company paid an $850 million fine to resolve the claims and brought in new leadership. At the time of the criminal conduct, Jeff Greenberg, Hank Greenberg's son, was the CEO of Marsh. He was forced to resign.

The "two cases against employees" seems to be a reference to the cases against Gilman and McNenney. Gilman's lawyer filed a $60 million suit in the U.S. District Court in Manhattan on Friday, and McNenney filed for $30 million in New York's Supreme Court — meaning Spitzer's facing both state and federal courtrooms. The lawyers argue that their clients are "readily identifiable as the subject of the defamatory comments" herein: "Marsh's behavior was a blatant abuse of law and market power: price-fixing, bid-rigging, and kickbacks all designed to harm their customers and the market while Marsh and its employees pocketed the increased fees and kickback." The lawyers also argue that no employees, rather than "many," had been convicted and sentenced to jail time.

It's definitely not cut-and-dry that Spitzer was referring to Gilman and McNenney in that blanket statement that begins with "Marsh's behavior." But even if he was, the pair has to prove "actual malice" in order to win their cases. As the Observerpointed out last year, that's a feat that fewer and fewer plaintiffs are able to pull off in recent times.

Still, it's been a rough summer for Spitzer, hasn't it? At least this means people will still talk about him!